Chilled and fresh foods have been pushed to the top of the shopping list as consumers increasingly look for healthier options. And many forecourt-based stores have been improving their ranges as operators seek to take their share of what has become a very profitable market.

More than 90% of all c-store retailers say they have increased the space dedicated to fresh foods in the past year, according to IGD research. Stewart Samuel, senior business analyst and author of the annual Convenience Retailing Report, says the health agenda has been key to this growth, with high-profile media campaigns such as the government’s Five-a-Day initiative and health-related TV shows fuelling demand. "Importantly, we also perceive the quality of fresh foods now on offer in the convenience sector to be much higher than in the past," he adds.

Forecourts, however, do still lag behind standalone c-stores.

The IGD found that between 2002 and 2005, fresh foods accounted for 16.8% of sales in forecourts, compared to 24.1% within the total convenience sector.

Samuel says that while the chilled supply chain serving forecourts has improved significantly, space - or lack of it - continues to be the major limiting factor for the industry. But with convenience store growth expected to outperform mainstream grocery, he believes the forecourt sector will become stronger as dealer groups increase their influence and focus on an improved retail offer.

He says he has already seen big changes over the past two years: "We visit a lot of stores as part of our research and there’s been a big improvement. There are some really good, credible chilled and fresh ranges out there."

BP’s link-up with M&S has played a major part in helping to boost perceptions, but has also set a very high standard for other sites to try and match. Those affiliated to a symbol group tend to perform better and many of the major names have been busily improving their product ranges.

Budgens is renowned for its fresh offer. Regional manager, Phil Wiles, reckons that some independent forecourt sites have successfully grown fresh and chilled to account for around 35% of shop sales.

"The key benefit of offering a good range is that your overall margin will be much higher than if you were only selling newspapers, cigarettes, snacks and car accessories. Develop a good fresh food offer that customers can rely on and they will use you as a destination store," he states.

Distress lines are must-stocks, says Wiles. These are the things that people are most likely to run out of such as milk, butter, cooked meats and cheese.

Fresh fruit and veg are also becoming more important, with Mintel reporting that sales increased by 20% between 2001 and 2006.

The market is now worth £8.13bn a year and is expected to continue to grow at 2-5% a year. Fruit is growing fastest, with on-the-go snacking and higher-value prepared produce, such as berries and tropical fruit, boosting sales.

Wiles adds that no matter how small the store, offering a core range of quality fruit and veg helps create an overall ’fresh’ impression.


Health is now a major the driver in all areas of food retail, and a trend that forecourts cannot afford to ignore. Tom Fender, sales and marketing director at research company HIM, says: "Around 75% of convenience customers we’ve asked say that they’re going to look more closely at what they’re eating and drinking. Forecourt customers in particular tend to be more affluent, younger professionals, who are likely to be more health-conscious," he comments.

This means that as well as stocking strong chilled food-for-later ranges, healthy food-to-go options are becoming more important, particularly as food labelling is more prominent. Single-fruit portions, such as apples and bananas, are increasingly being offered as a healthy impulse snack. Meanwhile, an array of ’better-for-you’ lines are jostling for space in the chiller. Smoothies and yogurts continue to be growth areas, while low-fat sandwich choices are also increasing.

Ginsters, for example, offers a ’Less than 350 calories’ range of sandwiches and Larry File, senior brand manager, says the chicken tikka flavour has sold especially well. The company has also launched a range of premium leaf salads. However, the challenge for retailers is striking a balance and not forgetting customers who are less concerned about their waistlines - after all original Cornish pasty remains Ginsters’ best-selling savoury snack.


As well as ticking healthy-eating boxes, chilled and fresh is also seen as the key to attracting female shoppers. And they spend more. According to HIM a female shopper at a site with a strong grocery offer spends nearly double the forecourt average - £8.61 per trip compared to £4.75 - and visits more often.

Peter Creek, forecourt specialist at Spar, comments: "Where we develop, we have the female shopper in mind and this helps our sites exceed normal forecourt sales expectations."

Spar has put major focus on its chilled ranges over the past year. In Scotland, Spar wholesaler CJ Lang has devised core chilled range checklists, based on sales analysis. This includes a forecourt-specific recommended range so retailers can make sure they’re stocking the best-selling lines.

CJ Lang’s marketing controller, Philippe Rondepierre says chilled is by far the biggest profit category for Spar Scotland. However, a major issue for forecourts, he says, is that no two are the same. With some sites being on transient main routes and others in village centres, ranges need to be more adaptable. "We try to work locally with retailers to ensure the right range for the location," he explains.

To reap the rewards the category requires investment and effort. Marketing is paramount, says Rondepierre, especially on transient sites. "It can take the best part of a year to build customer awareness. There will always be a large number of people who walk straight down the first aisle to pay and don’t look around the store. Make them aware by using outdoor pos, such as forecourt posters and pump crowners, which they’ll see before they come through the door."

Managing the section is another challenge. "Availability is key," stresses Rondepierre. "You cannot operate fresh foods without an element of wastage and this needs to be budgeted for and seen as part of the investment. If you keep stock levels too tight then you’ll run out and be seen to be inconsistent."

Good housekeeping is also vital - date codes need to be checked, due diligence demonstrated and deliveries properly managed, as well as keeping the chillers clean and tidy. Spar recommends appointing dedicated members of staff to do this.

Among the symbol groups, Londis has recently undertaken one of the most comprehensive revamps of its chilled and fresh ranges, something it promised to do when Musgrave Budgens Londis (MBL) was formed in 2005. It now offers a 650-strong core range of own-label products, including ready meals, yogurts and desserts, cooked meats and cheeses. The portfolio has been developed to offer a hierarchy of ’good’, ’better’ and ’best’. Steve Carter, MBL’s head of buying for fresh, says products were selected using a ’20/80-rule’, so they are based on the top-selling 20% of Budgens’ lines that generate 80% of sales.

A new range of pre-packed fruit and vegetables has also been launched, with around 70 lines. "All produce is class one quality and comes direct from the growers," says Carter.

"We run a pick-to-zero system, which means retailers order exactly what they want and we order precisely the same amount from the suppliers to deliver to us the next day, to minimise on wastage."

Added to this is a new range of chilled sandwiches and wraps, which are offered to retailers on a sale or return basis. Margins are as high as 40%. Finally, a range of fresh meat and fish will be launched in April.

Not to be out-done, Budgens has also relaunched its fresh fish range. Labelling focuses on provenance and highlights those products high in the so-called healthy oil Omega 3. Smaller cases have also been developed for shorter life products to help smaller independents control wastage.

== SPREAD it around ==

They might not be the most exciting products in the chiller, but Malcolm Bamsey, customer account manager for Unilever, says forecourts shouldn’t underestimate the value of spreads as a key top-up or distress product. In fact, since so many purchases are distress he suggests there’s an opportunity to trade consumers up to higher-margin 500g pack sizes, rather than focusing on 250g packs.

Bamsey recommends a tight range, based on the top-selling brands and including a product in each of the areas of butter, buttery spread, healthy spread and cooking/baking spread. To support forecourt retailers, Unilever produces a direct mailer, called Forecourt Focus, offering merchandising, brand advice and money-off vouchers.

Cheese snacks have been trading on their better-for-you credentials and are enjoying 4% year-on-year growth in the convenience sector, where they are worth £47m, according to AC Nielsen figures. Caryn Gillan, head of category management at Bel UK, says mini cheese portions are the fastest-growing part of the sector and ideal for forecourts as they’re easy to eat on the move. She advises that they are merchandised with sandwiches and lunchtime products.

Adult cheese snacks are also in strong growth, fuelled by new product innovations such as Kraft’s Philadelphia Splendips.

However, with so many products fighting for space it can be difficult to decide what to stock. To help independent retailers, Kraft Foods has developed a strategy to manage its range of cheese products, which also includes the Dairylea brand.

Sarah Petts, channel and communications manager, says: "While adult snacking is currently the best performing sector it only makes up 3.9% of the category, so retailers should stick to the top products. We’ve identified a core range of best-selling products that are the most suitable for the convenience trade and will help generate incremental sales."

This has been supported by price-marked packs, to encourage trial and impulse purchases, and smaller case sizes, which are cheaper to buy and easier to store.


=== case study: budgens langford ===

Darren Hamilton manages Philip and Lesley Tout’s 3,200sq ft Budgens forecourt store at Langford near Bristol.

He says: "Fresh and chilled is the most important part of our business - it’s what differentiates us from our competitors. It brings in regular shoppers, plenty of whom come in to shop even if they’re not refuelling. We have regular trolley shoppers, some of them spend £50-£100 per shop.

"Chilled and fresh represents around 34% of our business and gives us a good margin. The downside is the controls you need to have in place to prevent wastage. You also need to have stock and order procedures and a sensible reduction policy."

Darren says his customers want to be able to find the makings of a whole meal in his shop, whether it’s an Italian ready meal, fresh meat or fish plus vegetables.

"Forecourt shoppers are also looking for convenience, so we stock products like prepared vegetables and fruit and washed bagged salads.

"Customers are buying considerably more fresh fruit and vegetables - our sales are up by over 11% on last year.

"Local foods also perform well and we highlight them in-store.

"Yeo Valley is local to us and we sell plenty of its organic dairy products, along with locally-made sausages, cheeses and ham. And we sell tons of local strawberries in season, which in turn boosts clotted cream sales.


=== get equipped ===

Merchandising is the key to maximising profit from chilled and fresh lines, says Colin Jones, sales and marketing director at Verco. "This means effective use of valuable floor space, high-visibility for the product and constant temperatures to maintain quality and hygiene," he explains.

Jones says the first thing to consider is the type of products you’re going to focus on, as equipment needs to be specified and rated for this - it’s no good buying a bottle chiller and putting sandwiches in it. Jones recommends forecourt c-stores opt for ’integral’, low-fronted open chill cabinets. These units are self-contained and ready to plug in, whereas remote units are around 10% cheaper but require additional engineering work on top of the unit costs, as the compressor and condensor are located outside the cabinet.

Previously integral units were noisier, gave off more heat and their higher frontage limited merchandising space. "These disadavantages are now gone. New compressor technology has enabled manufacturers to produce a new generation of low-front integral cabinets which offer increased merchandising space," says Jones.

Verco has used ’horizontal scroll compressors’ to create its lowest-fronted unit, the Kingston, which was recently supplied to Somerfield. The company’s original low-fronted unit, the Cambridge, offers a smaller footprint and is favoured by the likes of Esso, while the competitively-priced newer Poplar range is aimed at smaller indies.


=== case study: llanfair londis ===

John Whittingham runs a small rural site with a 1,000sq ft Londis store in the village of Llanfair, Wales. His was one of the first forecourts to trial Londis’ new range of pre-packed fruit and veg.

John says: "When we took over the site in 1988 it wasn’t even self-service and the shop was just a kiosk. Today’s customers expect a lot more so four years ago we decided we had to redevelop.

"Chilled and fresh produce is becoming a much bigger part of the store. We were buying stuff locally before, but it was difficult to get in small quantities. The labelling also wasn’t right and delivery could be a bit hap-hazard.

"The new Londis fresh range is attractively packaged and can be bought in whatever quantity we need. It’s a little bit more expensive but it’s worth it. It’s selling well so we’re getting very little wastage. We currently have just a metre of open shelf space, but are looking to increase to three. We’re also thinking of putting in a new chilled bay, as the produce keeps better if it’s chilled. "